Forex Markets Hold Steady as Traders Await Fed Minutes Amid Thin Year-End Volumes 
Wall Street Ends Mixed as Tech and Financial Stocks Weigh on Markets Amid Thin Holiday Trading 
South Korea Factory Activity Returns to Growth in December on Export Rebound 
Asia Manufacturing PMI Rebounds as Exports and Tech Demand Drive Growth into 2026 
China Imposes 55% Tariff on Beef Imports Above Quota to Protect Domestic Industry 
U.S. Stock Futures Slip as Year-End Trading Turns Cautious 
Asian Stock Markets Start New Year Higher as Tech and AI Shares Drive Gains 
U.S. Dollar Slides Toward Biggest Annual Loss Since 2017 as 2026 Risks Loom 
U.S. Stocks Slip as Gold Rebounds Ahead of Year-End, Markets Eye 2026 Outlook 
Federal Reserve Begins Treasury Bill Purchases to Stabilize Reserves and Money Markets 
USDA $12 Billion Farm Aid Program Draws Mixed Reactions from Row Crop Farmers 
U.S. Dollar Starts 2026 Weak as Yen, Euro and Sterling Hold Firm Amid Rate Cut Expectations 
Japanese Business Leaders Urge Government Action as Weak Yen Strains Economy 
South Korean Won Slides Despite Government Efforts to Stabilize Currency Markets 
Asian Currencies Trade Flat as Dollar Weakens in Thin New Year Trading 
South Korea Inflation Rises to 2.3% in December, Matching Market Expectations 
The U.S. dollar held onto its sharpest gain in a week on Wednesday, driven by safe-haven buying after an Iranian missile attack on Israel, heightening concerns of a wider conflict in the Middle East.
Euro, Yen, and Safe-Haven Currencies React
In early Asia trade, the euro dipped below $1.10, marking its largest drop in nearly four months. The yen and Swiss franc remained steady at 143.45 per dollar and 0.8463 per dollar, respectively, while the New Zealand dollar nursed a 1.1% overnight fall to $0.6283. Oil prices also spiked 2.5% on the news.
U.S. Dollar Index Surges Amid Tensions and Data
The U.S. dollar index jumped about 0.5% overnight to 101.2, its largest rise since September 25. The increase was partly fueled by a stronger-than-expected U.S. job openings report, adding to safe-haven demand amidst Middle East unrest.
Israeli-Iranian Tensions Drive Market Uncertainty
Israel reported more than 180 ballistic missiles fired by Iran, with Iran’s Revolutionary Guard Corps claiming the attack was in retaliation for Israeli actions against Hezbollah militants in Lebanon. No injuries were reported, but potential escalation concerns linger as Israel considers further military responses.
Oil prices are expected to fluctuate depending on Israel’s next steps, particularly if it targets Iran's military or oil assets, according to ANZ analysts.
Other Currencies and Market Reactions
The Australian dollar fell to $0.6883, though upbeat retail sales data limited losses. The British pound also saw a 0.7% drop before stabilizing at $1.3278 in early Asian trade.
New Zealand Interest Rate Outlook
A business survey in New Zealand suggested rapidly cooling price pressures, raising the likelihood of a 50-basis point rate cut next week. Westpac and BNZ have revised their forecasts to reflect this expectation, with markets pricing in a 77% probability.
U.S. Domestic Developments
Traders are also monitoring the ongoing dockworkers' strike on the U.S. East and Gulf coasts, which has halted about half of the country's ocean shipping. Additionally, a vice-presidential debate between Democrat Tim Walz and Republican JD Vance is scheduled for later in the day, along with anticipated U.S. private payroll data.
